LatAm credits drift in range amidst rate volatility

NEW YORK, June 5 (IFR) - Latin America credits were largely
ending flat to slightly softer on Friday after a busy week in
the primary market, which saw close to US$4.5bn in new supply.

Rate volatility continues to weigh on sentiment, and another
spike in US yields today didn't help.

A strong non-farm payrolls numbers sent the yield on the
10-year US Treasury as high as 2.44% amid expectations that the
Fed could tighten monetary policy sooner rather than later.

A renewed surge in supply has also weakened the backdrop
somewhat for the region's debt prices during a week that saw
more outflows out of EM debt funds.

Sub-investment grades, which are more immune to Treasury
volatility, were some of the better performers Friday. LatAm
Airlines' new 2020s jumped to 101.00 after pricing yesterday at
par to yield 7.25%, flat to initial price talk.

Bonds issued by Petrobras, which shocked markets earlier
this week by coming with a rare Century bond, were largely
drifting amid light flows.

The new 100-year bond was being quoted at 525bp after
hitting an earlier wide of 528bp, leaving it essentially flat to
where it closed on Thursday.

Real money accounts were seen selling their 30-year holdings
in Petrobras to go into the longer bond for a nice yield
pick-up, said one trader.
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